For Historical reference - the OEX or SP 100 Equivalent during the 1987 Reversal:
Baseline VXO (Correlated Historical) Spiked to 30 from 18.22.
At the time I was working at Drexel and will never forget how Investors began selling OEX Puts at the Money/Above - believing the one-day event was a knockoff.
This was Friday., end of week anomaly. Screw Germany was the thinking. The Ripples will be contained. Greenspan provided the Emergency pat down to Member Banks the following week, reminding them - this event must be contained for everyone's Financial health.
The S&P 500 lost 10% the week ending Friday, October 16, 1987 and lost an additional 20% the following Monday, October 19, 1987.
Nervousness appeared the following Monday AM briefing @ 5 AM. John Jetter asked the team to contact clients and reduce exposure to OEX to reduce Risk.
Monday did not end well for those who did not heed his strategy.
The VXO on Equivalent - Spikesd again to 170+ Monday, setting near 150 on the Day.
This was THE largest single Daily move in Market Volatility in History.
The One Day wonder turned into the largest Bloodbath in History for Bulls and sellers of OEX Puts, Dip Buyers, and the Pop and Fresh Peter Lynch Herd.
They were decimated, the Magellan Fund took its largest 2 Day loss ever. Small Caos were raked - defeating the individual investors had inherent advantages over large institutions Thesis.
Theories do jump out of High rises in a Lifetime of Investing.
Leverage was not an issue then as it is now.
It sets a preamble for enormous declines, the Potential for them.
@Peterson, * it can simply collapse from here as well - if this repeats the FEB 2020 Pattern.
CASH and BIOTECH here, but exiting BIOT on during Arca IF the Liquid is there.
It's a "Fools rush in moment IF the Operators want a higher Fill."
We'll know more Monday by NYSE Open.
It does not look good at all to your point, the decline is well supported, but the VIX will need to continue STRAIGHT UP.
We'll see how it plays out, no need to rush anything, that is how you lose enormous amounts of Capital very Quickly.
Use the TICK to monitor the MOMENTUM IN SELLING it works extremely well on all timeframes, shorter for Scalp entities obviously.
fantasyste
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@HK_L61, sorry, what is the TICK? and how it relates to the VXX sorry?
HK_L61
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@fantasyste, The NYSE TICK is a measure of buying pressure for the NYSE, not the VXX
fantasyste
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@HK_L61, sure thank you. But you mentioned that we need to check the LOW TICK to understand when to buy VIX... so with low tick is time to buy the stocks in the market and with high tick selling? sorry for the misunderstanding
HK_L61
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@fantasyste, NO, I did not. It Correlates to the ES YM RTY... Hence "NYSE" TICK
You use the VIX to correlate the LOW TICK as where the VIX is in its range matters.
I know this is difficult when you are unfamiliar so I will clarify it late today using Data from today.
This will make it clear for you.
Apologies, it can be confusing. I'll simplify for you later today.